Hi Traders! EURNZD short term forecast update and follow up is here. On February 23rd 2023 I shared this “EURNZD Technical Analysis And Short Term Forecast” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club. Spoiler alert – free memberships are available!
My Idea
On the H4 chart, the price reached a key resistance zone that has formed based on the 61.8%(1.70929) Fibonacci expansion level of the big wave and the 61.8%(1.71047) Fibonacci expansion level of the small wave. The price respected this zone and is currently moving lower. Also, we have a bearish divergence that has formed between the first high formed at 1.71070 and the second high formed at 1.71756 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads a value over 25 which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and until the key resistance zone (marked in red) shown in the image below holds my short-term view remains bearish here. A valid breakout below the most recent uptrend line would be the validation for this bearish view.
In this pair, until the key resistance zone holds I was expecting short-term bearish moves to happen. Also, I mentioned that “a valid breakout below the most recent uptrend line would be the validation for this bearish view”. The price action didn’t follow my analysis here, the validation for the bearish view which is a valid breakout below the most recent uptrend line didn’t happen. Alternatively, the price moved higher and we got a valid breakout above the key resistance zone. This is a contradictory sign opposing the short-term bearish view. So, my current view on EURNZD is neutral.
So, traders, when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This EURNZD short-term forecast is yet another good example of this scenario.
This is why I wanted to show this example to help you understand why we should always trade based on the facts and hints provided by the market and take the right actions according to that. Even though we had facts supporting the bearish view here, the price moved higher, and we got a valid breakout above the key resistance zone which we may consider as a fact provided by the market invalidating this bearish view. This is why we should always trade based on the facts and hints provided by the market and take the right actions according to that.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
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